Where Do We Stand on Phasing Out Medicare?

I wanted to take a moment to update you on where we stand on Paul Ryan’s plan to phase out Medicare and replace it with private insurance and vouchers. The short version: where we are is not good. Somewhat paradoxically, Medicare may actually be in far greater danger of being dismantled than Obamacare. More on that in a moment.

In recent days we noted that Paul Ryan and people in the Trump camp had suggested that Congress might use a single piece of legislation or at least simultaneously repeal Obamacare and phase out Medicare. It was suggested that this might happen as soon as January. That still may happen.

However, today Rep. Tom Price (R-GA), Chairman of the House Budget Committee, told reporters that he and his colleagues are eyeing phasing out Medicare in six to eight months, i.e., during the summer of 2017. This would mean doing it as part of the FY 2018 budget process. This would have a number of benefits, not least of which is that it would allow Republicans to move a phase out bill through the Senate on a simple majority vote – i.e., no filibuster.

I think the best answer is that we don’t know whether this is going to happen in January or in the summer. There is a huge amount of legislation the GOP Congress wants to pass – Obamacare repeal, big tax cuts, possibly some infrastructure bill. So in sheer workload terms later in the year makes sense. It is also becoming increasingly clear that Republicans have no clear plan for how to repeal and replace Obamacare. So combining Medicare Phaseout with Obamacare repeal could blow up in their faces if the Obamacare repeal process founders.

The argument for doing it early, however, is to act before opposition to Medicare Phaseout gains steam. Do it and get it done while Democrats are still on their heals and the country isn’t really paying attention. Depending on where Trump comes down on this there might also be a logic to getting a bill in front of Trump quickly while he’s in a compliant mood rather than seeing him go wobbly if public opposition mounts later in the year.

Does Trump really care about Phase Out one way or another? Does he even know what it is? Before he started cutting deals with Ryan and establishment Republicans he was actually pretty clear on never taking an axe to either Social Security or Medicare. His position has generally been that it would be stupid and politically suicidal rather than being based on any policy or ideological conviction. But Trump’s a wildcard – which is a reason for the Ryan forces to move faster.

If I had to guess I’d say it happens later in the year. But it would be foolish for Democrats to assume that’s the case. Indeed, a failure to mobilize early would dramatically increase the incentives to act quickly in January.

Here’s one key point to keep in mine – one that Sen. Hatch referenced obliquely in his comments today on Capitol Hill. I think there will be many Republicans who will be wary or possibly unwilling to move on phasing out Medicare unless they have at least token bipartisan cover provided by Democrats. If it’s only Republicans, I think they will have a hard time keeping their caucuses in line to take the plunge. If they can bring over a few Democrats though, they’ll feel much more confident about it. That’s the Democrats key strength here.

Meanwhile, Sen. Lamar Alexander (R-TN), who chairs the key Obamacare-related committee (Health, Education, Labor and Pensions) gave reporters a long list of reasons why repealing and replacing Obamacare may take years. Indeed, he put so many obstacles in place that a reasonable interpretation of his remarks would be that repeal will never happen at all – that is, if we define repeal as scrapping the law and kicking most or all of the people currently insured under Obamacare off their insurance. Alexander said the GOP’s goal should be to “be the rescue party instead of the party that pushes millions of Americans who are hanging by the edge of their fingernails over the cliff.” He also said that repeal could only take place with 60 votes – i.e., with a lot of Democrats.

Minor-Trivia Bonus Morsel: Senator Alexander was the creator of the ! presidential candidacy mimicked by Jeb! in 2016. Lamar! also crashed and burned like Jeb! That was in 1996.

Back to our story of the end of Medicare.

The simple fact of the matter is that Republicans can talk about repeal and point out the shortcomings of Obamacare. But they will be hard pressed to kick tens of millions of people off the health care rolls. This is why going back more than 6 years Republicans have never been able to come up with an actual proposed replacement. Obamacare, or something broadly similar, is the most business friendly and economical way to cover the people in question. We’re now hearing Trump and other Republicans say that maybe they’ll get rid of Obamacare but hold on to the ban on denial of insurance for preexisting conditions. But this is nonsense. It’s like saying you want the table without the legs. Don’t we all? It seems quite possible that we will end up with the basic edifice of Obamacare in place, with various revisions, followed by a grand rebranding as Trumpcare. I have no idea, frankly. But if Alexander is serious about what he’s saying, he’s basically thrown a wrench into any idea that repeal is going to happen right out of the gate in January.

So, as I’ve said, as long as Democrats do not effectively mobilize and as long as public focus remains minimal, it seems plausible Ryan’s Medicare Phaseout plan is more likely to pass than repealing Obamacare.